What is a Shop and Establishment License?
Shop and Establishment License refers to a Certificate or License issued to the business, professions, and trade registered under the provisions Shop and Establishment Act. All the rules and regulations of this Act are governed and administered by the Department of Labour.
This License is a requirement when an entity or a business employs people as full -time employees, casual workers, contract workers, etc., to regulate and administer the working conditions and also to protect their rights. People also refer to it as the Shop License.
Furthermore, the applicant must obtain the license within a period of 30 days starting from the day of commencement of work. The validity of a Shop License is for one year, and the same can be renewed every year. However, the rules and regulations concerning renewal vary from one state to another state.
What is the definition of “shop” under the Shop & Establishment Act?
“Shop” under this act refers to any premises where goods are sold either by retail or wholesale. It even includes a places such as where the services are rendered to customers and includes an office, a store-room, godown, warehouse or workhouse or workplace; whether in the same premises or otherwise, used in or in connection with such trade or business but does not include a factory or a commercial establishment.
What is the definition of “Establishment” under the Shop & Establishment Act?
A shop, a commercial establishment, residential hotel, restaurant, eating-house, theatre or other places of public amusement or entertainment to which this Act applies and includes such other establishment as Government may, by notification in the Official Gazette, declare to be an establishment for the purpose of this Act.
Objectives of Shop Act
- The main aim behind the Registration is to protect the rights and to provide benefits to the employees working in an organized sector such as hotels, establishments, and restaurants along with in the unorganized sectors.
- Additionally, the Registration aims at regulating and administering the day-to-day employees’ treatment and also to set better standards for employment.
Benefits of Shop and Establishment License
- Firstly, Shop License provides Legal Acknowledgment to the particular shop or establishment.
- It also acts as an essential Registration for further registrations. This license acts as a business proof. Hence, it helps in obtaining additional registrations in India.
- Further, shops cannot open a bank account without a Shop License. Hence, this License is mandatory for opening a bank account in the name of shop.
- Additionally, Shop License helps in raising investments by way of Venture Capitals or Loans for the proposed business establishment.
Who all are eligible to obtain Shop Registration in India?
The following entities are eligible to obtain the license:
- Retail and wholesale shops;
- Premises which render services to customers
- Storeroom, godown or warehouse;
- Workhouse or workplace, used for trade or business;
- Commercial establishment;
- Residential hotel;
- Restaurant or eating house;
- Theatre or place of public entertainment or amusement.
Why does a shop or establishment need registration under this Act?
- To regulate the working conditions of employees;
- It also provide rights to employees and impose obligations on employers;
- Furthermore, to provide guidelines regarding various aspects like working hours, leave policy, payment of wages or allowances or deductions, opening and closing hours of shop or establishment, precautionary measures for accidents, cleanliness, lighting or ventilation, etc.
- To prohibit child labour.
What is regulated under this Act?
The following aspects are regulated under Shop and Establishment License:
- Employee work hours
- Break timings
- Opening closing hours
- Weekly holidays
- Wages
- Wages for overtime
- Deductions on wages
- Wages for holidays
- Leave policy
- National and regional holidays
- Cleanliness of premises
- Lightning and ventilation
- Accidents
- Precautions from fire
- Record keeping
- Welfare and safety of workers
- Prohibition of discrimination against women worker
FAQs
The documents and records that are mandatorily maintained under this Act are documents such as Employment Register, Details of the Fine imposed, Advances Issued, Salary Details, Salary Deduction Details, and Holiday’s awarded.
Yes, every business registered under the provisions of the Shop and Establishment Act needs to take prior approval from the labour department before commencing its business affairs and operations.
Yes, every business, shop, and establishment needs to obtain registration under the Shop and Establishment Act within a period of 30 days from the date of commencement of operations.
The primary objective of this act is to provide uniform privileges and benefits for all employees working in different establishments, shops, commercial places, residential hotels, restaurants, theatres and so on.
Trade License is a license or permission issued by a municipal corporation granting permission to carry on a particular business at a particular address. It ensures that the citizens are not adversely affected by health hazard and nuisance by the improper carrying of trade.